The Bethel Hospital Association of Mountain Lake, Minnesota, held its incorporation meeting on 2 January 1905 for the purpose of establishing the Mennonite Hospital of Mountain Lake. The instigator of this movement was Jacob D. Hiebert, who with his brother David had purchased the old village schoolhouse with the intention of converting it into a hospital. By September the hospital was ready for its first patients with Margaretha Friesen as the first nurse.

From 1912 to 1930 the institution was merged with the Bethel Deaconess Hospital of Newton, Kansas, the name of the local unit being changed to "Bethel Deaconess Hospital of Mountain Lake." In 1921 a new 20-bed brick hospital was constructed at a cost of about $160,000. The former building was then used as a home for the aged, operated under the same management as the hospital. Since 1911, when the institution was stabilized, superintendents who served a year or more included: Elizabeth Harms, 1911-1914; Ida Epp, 1915-1927; Clara Schmidt, 1927-1928; Agathe Toews, 1929-1932; Marie Toews, 1932-1934, 1938-46; Marie K. Fast, 1934-1937; Elfriede H. Regier, 1947- . Other superintendents served for shorter terms.

By 1947 the service of the Bethel Hospital, as it was known since it became independent in 1930, expanded to the point where it cared for a total of 731 patients annually. The capacity of the home for the aged was 20 persons, with every room occupied.

The urgent need for a new and larger home for the aged prompted the construction of a new brick 52-room building at an estimated cost of $240,000, dedicated in 1950.

While the Bethel Hospital Association was organizationally independent of the churches, its constituency is composed almost entirely of Mennonites residing in Mountain Lake and its vicinity.